Edmonds entrepreneur sentenced to prison for tax fraud

An Edmonds software entrepreneur was sentenced Wednesday to 18 months in federal prison for filing a false tax return, the U.S. Attorney’s Office reported.

Lyle R. Larson, 43, the owner of Red Planet Corp., was ordered to pay $879,252 in restitution. As part of his April plea agreement in U.S. District Court, he admitted to under-reporting his income and not reporting self-employment taxes from 2000 to 2003, despite earning more than $2.8 million as a self-employed programmer and consultant, the U.S. Attorney’s Office reported.

Larson reported $38,000 in business income on his tax returns, but filed no returns for 2004, 2005, or 2007, the U.S. Attorney’s Office reported. Meanwhile, he bought cars, a yacht and real estate.